Why your retail ERP needs a good multi-channel inventory module
Merchandise management is what sets retail ERP systems apart from ERP designed for any other environment. Merchandise is the inventory a business has right now for sale to customers desiring those items. To have exactly the color and size a customer wants immediately available it the goal for any retail business. Further, it just arrived minutes ahead of that customer and can be priced at an amount that begs that customer to buy immediately and yield a profit at the same time. Is this possible? Yes, much of the time and the right retail ERP system can help make it reality.
Retail today goes beyond a physical store front. E-commerce is a major part of retail these days. Merchandise management is largely the same, you need the right item on hand and available for sale when the customer is online or present in the store. If your retail business trades online then it is essential that your centralized inventory module is fully integrated with your e-commerce system.
Cost and price management
Cost of any SKU is closely related to the supply chain component of retail ERP. A successful retailer works closely with current suppliers to stock merchandise that a customer wants at the lowest possible total cost. Supply chain systems also connect to new suppliers who might have products even more desirable at lower still prices. Low initial cost is the first target. Total cost includes the ability to easily and quickly make returns to the supplier at little or no penalty. Cost can also include financial terms such as payment due after sale. If the supplier can monitor sales and inventory levels using an inventory module, they can replenish fast-selling items without the need for a purchase order.
In addition, price management might mean a supplier can provide special, lower-prices for seasonal or promotional merchandise. These cost and price management tools should be sought in any retail ERP.
Retail stock ledger
An accurate count of each SKU on hand with separation by every size, color, and other distinctions is an important part of retail ERP. As customers pay for their purchases and leave the store, that stock ledger should be automatically updated. Return merchandise that can still be sold should be added to the ledger right away. Shrinkage, or other unexplained loss of inventory is an unfortunate reality in retail and each SKU should have a reasonable rate used to adjust the ledger.
An accurate ledger helps determine when to replace replenishment order. An accurate ledger also is a tool to monitor those items that do not sell so that they can be returned or moved to a store where a sale is more likely. An accurate ledger is a critical component in determining expenses and profit or loss over time.
Forecasting and planning
Retail has a strong seasonal element to it, so accurate forecasting activities are essential. ERP is a valuable tool to ensure optimal profit in any season. How many footballs were sold last year in the weeks before the start of the season? What was the weather like last year and what is the weather forecast this year? ERP doesn’t maintain all these data, but in retail, an ERP can match the data it has with external data to predict how much to order and when to accept delivery. A supplier might make those footballs over months and make several deliveries to a warehouse to match your requirements against their ability to produce. Those early-delivered footballs are a part of the stock ledger but also a liability as payment will not be made until the season begins.
These are key features of any good centralized inventory module. Know which ones are important in your particular business and be sure the ERP you select has the ones you need.
Featured white papers
3 warning signs your potential ERP vendor is in financial trouble
Learn the signs of an ERP vendor in financial trouble before selecting your ERP software.
What should go in your ERP RFIs?
How to use your ERP RFI to find the most suitable ERP vendor for your project.
Seven must-haves for construction ERP
Include these must-have requirements during your Construction ERP selection